Interactive Brokers Horror Story
Anni Mouse
Horror Story about Interactive Brokers (from a Subscriber): “I just
wanted to pass along an experience I had with Interactive Brokers (IB)
that I thought was important
for everybody to be aware of. I executed the GOOG spreads you talked
about prior to earnings last
week. Yesterday, I was assigned the Feb 470 puts. IB never notified me
of the assignment, which
caused a cash deficit in the account. Rather than notifying me of the
deficit, they proceeded to
liquidate random positions (including non-GOOG positions) until the
cash deficit was satisfied. This
liquidation happened first thing in the morning. I was alerted to the
problem when I received email
confirmations of the liquidating trades. I called to inquire about the
trades, and that is when they
told me I had been assigned in my account. I complained about not
having an opportunity to rectify
the deficit myself, and they responded that it is not their policy to
notify account holders when they
have been assigned an option! I have been a professional options
trader for 16 years, and have
never heard of anything so careless and dangerous to an account
holder. As even amateur traders
know, option assignments have a huge impact on the cash positions in
an account. Essentially my
entire portfolio was shattered because of this situation. I called
Schwab, OptionsXpress and
thinkorswim. They all have a policy of alerting account holders
immediately of an assignment. I
can't understand Interactive Brokers' policy, but I think your readers
should be aware of this danger
when holding an account with them. By the way, I closed my account
with them immediately. They
may have the best rates, but the risk they choose to put their
customers at through this policy is too
large to offset the lower rates. Their customer service was also among
the worst I have ever
encountered.”
Dr Tormento
news:cabtu11dop1e00vnd...@4ax.com:
>
> Yesterday, I was assigned the Feb 470 puts.
With the stock trading aroung 360, these contracts were in the money by
about 110 points with just one week to go. You have to be more than a
little dense not to see an early exercise possibility. Positions like that
should never be allowed to run all the way to expiry.